Up and Down Wall Street

The Harsh Lessons of Detroit

A borrower's ability to pay, rather than contractual obligations or precedents, is what investors should focus on.

It is the best of times and the worst of times, and while that is thoroughly unoriginal, it aptly tells the tale of two financial stories.

While the major stock-market averages reached new highs and Moody's Investors Service raised its outlook for its triple-A rating for the U.S. government, the city of Detroit filed for the largest municipal bankruptcy in history.